Time and Money

Should I purchase tax certificates from a local tax sale or from the State of Alabama?  What’s the difference and what does it matter?

Time

Local (county) tax sales are held once a year on a date determined by the county. The sale lasts until all tax certificates  from the previous collection year, have been offered at public outcry auction to the highest bidder.

If a certificate garners no bid, it is automatically “Sold to State” and becomes part of the State’s perpetual inventory until it is either: (a) redeemed at the county level by the owner or (b) purchased from the State by an investor.

The opportunity to purchase from the State is a YEAR ROUND opportunity.  Their inventory is a COMPREHENSIVE listing of not only of the most recent certificates but includes ALL parcels unredeemed and unpurchased.

Money

At the local tax sale, certificates are offered to the highest bidder and MAY garner an excess bid. Certificates purchased from the State of Alabama are sold FOR TAXES ONLY.

There are other considerations:

(1) You may be thinking, “By the time the properties get to the State, they have been picked over and all the good stuff is gone.”  That may be true to an extent.  However, the trend we are seeing makes that argument somewhat irrelevant–at least for now.  Have you seen this one? Or this one?

(2) Some counties will actually maintain possession of your certificates for you after you buy from them at the tax sale.  That cuts down on your administrative work.  Conversely, the State will send you the actual certificate you purchase.  You are then responsible for keeping up with it (the original) and any subsequent receipts. We offer an optional service in which we handle all the paperwork for a nominal fee.

(3)  When you buy from a county, you typically make one payment (depending on their terms) at the end of the tax sale.  When buying from the State, you must submit one cashier’s check and accompanying paperwork per parcel.  NOTE: If you buy from the State through us, you write one check and  we’ll handle all the paperwork.